US open: Dow breaches 29,300 again as traders look past coronavirus outbreak
US stocks opened higher on Wednesday as corporate releases continued to stream in and investors shrugged off concerns about the spread of a deadly virus in China.
As of 1530 GMT, the Dow Jones Industrial Average was up 0.38% at 29,307.95, while the S&P 500 was 0.37% firmer at 3,333.24 and the Nasdaq Composite was 0.58% stronger at 9,425.50.
The Dow opened 111.91 points higher, bouncing back somewhat from the previous session which ended in the red as traders returned from the Martin Luther King Jr holiday to concerns over a new deadly virus outbreak - with one confirmed case in the US.
China unveiled measures to stem the flow of the deadly Wuhan coronavirus on Wednesday, tempering the fears of a global pandemic that hit sentiment and sent markets tumbling in the previous session.
While US public health officials confirmed that the first US case had been diagnosed in Washington State, the Centers for Disease Control and Prevention said overnight that the male patient posed "little risk" to the general public.
CMC Markets analyst David Madden said: "The Chinese government's response to the health situation seems to be more upfront than their handling of the SARS crisis, so traders aren't as fearful."
However, he did note that "huge numbers" of people were expected to be on the move during the Lunar New Year holiday and cautioned that "the situation could worsen", perhaps explaining why some traders weren't "overly bullish this morning".
On the trade front, US Treasury Secretary Steven Mnuchin said that the phase two deal with China has no deadlines and rejected the idea that it would create a digital "Berlin Wall".
"So the first issue we’re very focused on the next 30 days is implementing phase one," he said regarding the deadlines of the next phase. Mnuchin added that the deal can be finalised before or after the US election in November.
In corporate news, Boeing shares fell after the aerospace giant said it did not expect to gain approval for the return of the embattled 737 Max until mid-year, while Netflix shares dropped after it forecast a tough start to 2020 and missed fourth-quarter growth expectations overnight.
On the macroeconomic calendar, overall mortgage application volume in the US fell 1.2% last week, according to the Mortgage Bankers Association. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $510,400 or less was unchanged at 3.87%.
MBA economist Joel Kan said: "Even with more positive developments surrounding the US and China trade negotiations and healthy retail sales data, investors seemed cautious and maintained their demand for safer US Treasurys, which kept yields lower.
"Our expectation is that rates will stay along this same narrow range."
Elsewhere, the Chicago Fed National Activity Index's reading for December signalled a weaker economy, coming in at -0.35 for the month, according to the Federal Reserve Bank of Chicago.
The reading was in contrast compared with the +0.41 reading the month before.
Lastly, US home sales grew to their highest level in almost two years in December 2019, indicating that lower mortgage rates were helping the housing market to regain its footing.
The National Association of Realtors said existing home sales had increased by 3.6% to a seasonally-adjusted annual rate of 5.54m units last month, marking the highest level since February 2018.
Economists had expected existing home sales to increase by 1.3% to a rate of 5.43m units in December.